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» Tips for Your Loan Package

Posted on 1/18/2006

P&Ls are not tax returns. They are profit and loss statements. They can be made to demonstrate different phenomena of your business and can be focused toward different readers. If you are making a P&L for a loan package, your P&L should show:

  • gross income
  • operating expenses including rents, cost of goods, labor, debt service, etc.
  • net cash flow into business

Then you can add another section showing capital improvements, major acquisitions, etc. If you simply run it all together, you can make a cash cow look like a money losing proposition. Make sure your P&L shows your business in an honest, but favorable light. Show the cash flow and then show what you spent the income on that will improve the business in the short and/or long term.

Posted in Avatar's Loan Criteria